Blockchain interoperability is on the rise and represents another milestone for the DLT industry. The latest advance in blockchain interoperability is the design of the EOS 21 protocol, which means that ERC20 tokens can be teleported onto the EOS blockchain without losing any functionality. The protocol was created by shEOS, a Spanish software company.
The purpose of EOS 21
The EOS 21 protocol was built so that a true token transmission could take place, not just a clone of tokens. What happens often is that tokens have to be burned or destroyed, which is a little cumbersome and leaves the doors open to malpractice in some instances. With EOS 21, the tokens are simultaneously destroyed on one blockchain and created on the other. This prevents an artificial number of tokens existing at the same time. It is similar in theory to the atomic swap, where coins are to be immediately exchanged without needing to utilize an escrow service. According to the development team –
“In the EOS 21 protocol, we are providing another option for ERC20 contracts that do not have a built-in pause/expiry function but who want to move their token to another chain. We are calling this action: teleportation. To teleport a token from one chain to another, it will exist on the destination chain, but no longer exist in a fungible form on the source chain.”
Who cares About blockchain interoperability?
Interoperability between blockchains is of vital importance. The future could well hold many disparate blockchains for various industries – a blockchain for electricity, a blockchain for government services, a blockchain for air travel, a blockchain for renting etc. Industry-specific coins seem to be the way forward, and there needs to be a way to transfer coins between blockchains. Third-layer solutions are becoming available to perform this function.
Interoperability between blockchains will also mean that developers can leverage the benefits of other systems. Hopefully, increased blockchain interoperability can also serve to unite the DLT industry once again, where the goal of jointly replacing a broken infrastructure has been replaced by an ‘every coin for itself’ mentality. Speaking on the importance of blockchain interoperability, the shEOS development team noted that –
“Recently, the importance of one specific development has become clear to us, and that is inter-blockchain communication and interoperability. […] How empowering would it be for developers to have freedom to move their tokens to any chain they wanted to? To any chain they felt best addresses the needs of their particular project. It’s widely known that each blockchain offers certain qualities that make it more appealing depending on the needs of the dApp developer.”
EOS 21 aside, it is also now possible to get bitcoin on the Ethereum blockchain, using a new token known as WBTC (short for “wrapped bitcoin”). This is the result of a combined effort from Kyber Network, Republic Protocol, and BitGo, ensuring that bitcoin can participate in Ethereum smart contract developments. One WBTC is to be backed by one BTC.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.